Tata Motor's Nano project evokes new controversy in Gujarat

12 November 2008

After pulling out `Nano' small car project out of Singur, Tata Motors has evoked a new controversy at its new home in Gujarat, with accusations flying from the opposition parties about the ''unprecedented'' sops given by the Modi government  to Tatas for bringing the project to Sanand amid fierce competition from Karnataka and Andhra Pradesh.

The Congress party which raised the controversy has now demanded a `white paper' on the agreement signed by the Modi government and Tata Motors as the deal lacked transparency and the state government has failed to announce the details of deal with Tata. (See: Congress plays Trinamool in Gujarat; challenges Nano deal) 

The Modi government has brushed aside the information sought under the Right to Information Act by the Congress party and the media and is hiding from disclosing details citing `confidentiality' which Tata Motors have demanded due to competition.

A note prepared for the state cabinet's approval detailing sops offered to Tata Motors and doing the rounds in Gujarat on Monday revealed that apart from giving loan of Rs9,570 crore at a nominal interest rate of 0.1 per cent with deferred repayment for 20 years, a whole gamut of other concession have been provided to Tatas.

The Modi government gave 1,100 acres of land in Sanand, nearly 25 km west of Ahmedabad, on the land of Anand Agriculture University (AAU). The AAU had 2,220 acres of land at the site, which has been transferred to the state government.

The land was given with all the necessary permissions and clearances at a rate of Rs900 per sq metre which works out to Rs400.65 crore and will be paid by Tatas in 8 annual installments at a compounded interest of 8 per cent per annum with a moratorium of two years.